Exports hit record high in March as trade deficit narrows

The increase came after stronger energy exports and gains in consumer goods

The energy and consumer goods sectors helped Canadian exports rise to a record high in March as the country’s trade deficit narrowed to $135 million, reports Statistics Canada.

Economists had expected a deficit of $800 million, according to Thomson Reuters.

“This is a solid report,” Benjamin Reitzes at BMO Capital Markets sais Thursday after the data was released.

The shortfall followed a revised deficit of $1.1 billion for February compared with an initial reading of a deficit of $972 million for the month. Gains in eight of 11 sectors in March helped exports rise 3.8 per cent to $47 billion, while volumes gained 2.5 per cent and prices increased 1.3 per cent. Driving the gain was a 7.0 per cent increase in energy exports to $8.7 billion. A boost in natural gas exports due to cold temperatures in the northeastern United States and higher coal exports to Asia were factors.

“Combined with a continued creep higher in crude prices, look for energy to continue being a catalyst in supporting Canadian exports,” CIBC economist Nick Exarhos wrote in a report.

Consumer goods exports also gained ground, climbing 6.8 per cent to $6.1 billion. Exports of other food products led the increase with a gain of 11.9 per cent to a record $1.4 billion, boosted by exports of yellow peas and red lentils to India.

On a regional basis, Canada’s trade surplus with the United States slipped to $4 billion in March compared with $4.5 billion in February.

Exports to the United States edged up 0.1 per cent to $34.4 billion, while imports from the United States increased 2.0 per cent to $30.4 billion.

Meanwhile, Canada’s trade deficit with countries other than the U.S. narrowed to $4.1 billion in March from $5.6 billion in February.

On the other import side of the equation, imports increased 1.7 per cent to $47.1 billion, with gains in seven of 11 sectors.